This Morning: AAPL Rising, Views Mixed, FB’s Next $$ Billion?

By Tiernan Ray

Here are some things going on this morning in your world of tech:

Shares of Apple (AAPL) are bouncing back from yesterday’s 3% sell-off, currently up $17.08, or 3.5%, at $503. A somewhat surprising development given the decidedly mixed coverage from the Street today. The shares were cut by Pacific Crest’s Andy Hargreaves to Sector Perform from Outperform, on worries about smartphone saturation limiting growth starting next year. And Merrll Lynch’s Scott Craig cut his price target to $630 from $720, while Stifel Nicolaus Aaron Rakers cut his price target to $725 from $825, both warning investors are conflicted and demand seems uncertain.

There were also some positive words, though. Katy Huberty with Morgan Stanley reiterated her Overweight rating on the shares, writing that the risk-reward balance seems favorable going into the January 23rd fiscal Q1 earnings report. And Cowen & Co.’s Matthew Hoffman this morning reiterates an Outperform rating, writing that despite fears of slack demand for the iPhone, “Our checks run counter to that sentiment; Apple’s smartphone share has risen sharply q/q, from 16.4% to ~23.5% overall (based on our 208MM C4Q12 forecast) while C4Q12 U.S. smartphone share likely increased to >35% from

Speaking of Apple, Bloomberg’s Edmond Lococothis morning writes that the company has begun to offer payment plans in China for purchasers of iPhones and MacBooks, as a means to more effectively compete with low-priced goods in that country.

And an article by DigiTimes’s Jessie Shen says that Taiwan Semiconductor Manufacturing (TSM) is likely to secure orders to produce Apple’s custom chips, and may already be working on engineering samples of the processors, with production happening some time after 2013, citing DigiTimes’s own research analyst, Nobunaga Chai.

Shares of Facebook (FB) are up a penny at $30.11 as the Street digests yesterday’s unveiling by the company of “graph search,” a new feature of its site for finding things, and its partnership with Microsoft‘s (MSFT). The reviews are largely favorable. Cantor Fitzgerald’s Youssef Squali this morning reiterates a Buy rating on shares of Facebook, writing that “We believe this could be Facebook’s next billion dollar opportunity.”

Yelp (YELP) shares are down 66 cents, or 3%, at $19.95, as graph search has definitely been perceived as a threat to the company’s local listings and advertising business. The stock got one downgrade this morning, that I can see, from Northland Securities, which cut the stock to Unerperform from Market Perform warning of increased competition.

Shares of telco equipment supplier Adtran (ADTN) are up $1.13, over 5%, at $22.11, after the company this morning reported Q4 revenue in line with consensus but beat on the bottom line, and projected this quarter’s revenue in line to slightly below Street consensus.

The Dell (DELL) LBO speculation game continues this morning. CNBC’s David Faber said sources have told him founder and CEO Michael Dell might invest new money into Dell to support a buyout, while reiterating a contention he made yesterday afternoon, that sources say the top end of any buyout bid would be $14 a share.

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JANUARY 16, 2013 11:31 A.M.

Bobby Zangrilli wrote:

Does Facebook have to prove anything anymore? They can grow 30% y/y (same as Google & Apple), but receive 4 to 7 times the valuation because of their upside. Now we're not allowed to see what they've built and people are calling it a billion dollar opportunity. Of course it's a billion dollar opportunity...but will people actually use this product? By not allowing people to use it, I'm left to assume they're not confident about its prospects either.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.